It was not so long ago that the actual merchandise was the focal point of most malls and shopping centers throughout the country. Technology, social media and the rise of a new generation have changed that focus. Or, at least, altered that focus, blurring the lines between products and services, retail and entertainment and ecommerce and bricks and mortar. Nowadays, shopping centers and the store brands that inhabit them must be much more. In fact, many are now tasked with being all things to all people. They can babysit your kids, act as your personal shopper, tell you which parking space is open, deliver your purchase to your front door, provide you with items that might complement your purchase and so on.
While there are a variety of very creative, well-informed and innovative people behind all of these new and emerging services, most of them have come to fruition through the use of technology. Yes, the term once reserved for the computer science, engineering and medical fields has now become a premier commodity — rivaling that of even the merchandise — in the shopping centers of America. Though the actual blueprint for the next wave of retail real estate remains to be seen as many initiatives are still in their infancies, we can obtain a solid glimpse of what may be to come by surveying what already is.
The Jetsons may have gotten it right after all. Last year saw the deployment of multi-functional robot assistants who can make the lives of mall customers and employees just a little easier, oftentimes with an added dose of fun.
Tally is a robot enhancing the lives of customers and shopping center employees. The Simbe Robotics creation, which is powered by an Intel processor, provides shelf auditing and analytics solutions for retailers. Tally can ensure products are always appropriately replenished, displayed in the ideal location and with the correct pricing. The robot can go to work both during store hours and after customers have left for the day. Intel is confident this type of technology can be the key to retailers’ future success both in terms of merchandising and the customer service experience.
“These robots will become more mainstream,” says Michelle Tinsley, director of the Mobility & Secure Payments team at Intel. “Millennials and digital natives are going to look back at this and see it’s a really cool, interesting way to draw them in and engage.”
Tally is just one endeavor Intel has partnered on lately. The company recently announced its Responsive Retail Platform, as well as plans to invest more than $100 million in the retail industry over the next five years. The platform will foster highly flexible, scalable and innovative solutions that will create a more efficient, intelligent and personalized shopping experience. The investment will enabling retailers to unify every part of the retail operation, thereby creating a positive impact on their bottom line and solving longstanding business challenges.
Tinsley believes this type of investment and experimentation is necessary if retailers and shopping centers owners are to survive in this new tech age, which is penetrating every aspect of life.
“What’s holding us back is not the technology,” she says. “It’s the willingness of retailers to experiment. What are the pros and cons? Where is the ROI? We have to start making some bold moves or we’re going to be viewed as the retailers of the past. Do you want to be like a Blockbuster video, or do you want to be a forward-thinking retailer?
THE INFORMATION AGE
Robots are not the only sources of information regarding the customer experience and merchandising analytics. In-store smart shelves with sensors, beacons that can access a customer’s shopping profile, voice-enabled search kiosks and “click and collect” apps can all provide a wealth of information to retailers and shopping center owners that can make their centers more efficient and pleasant for the customer.
“We have a technology that identifies when customers come to the center, how long they stay, where they go and whether we are attracting new customers and retaining loyal ones,” says Sandy Sigal, CEO and president of NewMark Merrill Companies in Los Angeles. “This helps us target our marketing, demonstrate the impact of various tenants to customer counts and, by comparing to previous days, weeks and months, help us determine shopping trends.”
Tinsley believes the use of this “fast data,” which is instantly delivered to retailers and landlords, will most heavily influence retail decision-making processes in the future. This is opposed to big data, which must be sent off, analyzed by a few experts and returned in the form of a couple new ideas.
“If you know you have a key customer who just walked into the store and can see their last few purchases — if you can get that information into the hands of sales associates so they can suggest complementary items, or simply tell an associate ‘hey, you just sold your last pair of size 4 jeans, go restock,’ that is fast data,” she says, noting that Intel has partnered with Levi’s stores on such restocking efforts. “That’s where there is a ton of business value. It’s very localized. It’s an in-store responsive retail platform. There is so much fast data going to waste and not being used. We’re trying to get retailers aware of this iceberg under the water.”
There’s information on customers for retailers and shopping center owners to be gleaned from the use of technology, and then there is information on retailers and shopping center owners for customers. This is supplied through a number of mechanisms, though the most common ones used include mobile apps with push notifications and interactive digital display screen.
“We use the same technology that identifies our customers to push out instant deals offered by our retailers,” Sigal notes. “These deals appear on their mobile phones and give them limited-time opportunities to maximize savings by cross-shopping.”
Pacific Retail Capital Partners installed a massive digital and sensory experience when it completed the first phase of renovations at the Shops at South Town in Sandy, Utah, this past February. The 1.3-million-square-foot center now features six digital directories with real-time deals and selfie photo capabilities; a 13-by-6-foot, ultra-high-resolution interactive play wall for children with unique gaming options; and a massive multi-media wall display with movies, sporting events, livestreams, digital art and other entertainment options. The wall also displays answers to text inquiries it receives from shoppers in near real time.
“The renovation at the Shops at South Town provided an opportunity to establish a revenue-generating artistic and promotional platform that includes digital art, messaging, branding, interactivity, advertising, sponsorship and promotional media opportunities,” says Najla Kayyem, senior vice president of marketing for Pacific Retail Capital Partners. “Our strategy was to provide a variety of media types and technologies to meet the desire for public engagement and social interactivity.”
Kayyem notes it was important for Pacific Retail to develop a digital and sensory experience that was engaging and relevant to all shopper demographics, not just the tech-savvy and Millennials.
“We have created a seamless sensory experience that fits the needs of Millennials, young families, Generation Z and seasoned shoppers through large-scale digital interfaces that are customized to the local market,” she continues. “As a family friendly market with a variety of ages — children, teens, parents, grandparents, etc. — that want to spend time together, it’s been important to add amenities that bring generations together for shared experiences. It also made the Shops at South Town a perfect test market for Pacific Retail Capital Partners to see how multiple ages interfaced and received the different technology components.”
Robots and large interactive displays may be convenient and entertaining for those who interact with them, but more time spent engaging with “free” amenities could mean less time is spent shopping. Kayyem doesn’t think so.
“Research continues to indicate that time spent in a shopping center correlates directly with dollars spent, whether with
retailers, service providers or restaurants,” she notes. “More important than that though, is the value of retention. The more Pacific Retail Capital Partners can retain loyal patrons and encourage them to bring others — of all ages — to build memories with them, then the more successful the center and our tenants will be, thus creating more value for the asset. We see the diversification of uses and technology as adding a lot of value and power to the real estate that we have.”
WITH BELLS ON
The use of consumer-driven technology is also adding value at Neiman Marcus stores across the country. The luxury department store retailer introduced interactive Memory Mirrors where shoppers can record and share video of themselves twirling in a new outfit. The mirrors were eventually adapted for eyewear purchases and installed in the beauty departments where they were renamed Memory Makeover Mirrors. The company might have outdone itself, however, when it opened its 95,000-square-foot store at the Shops at Clearfork in Fort Worth, Texas, this past February.
The two-story outpost features eight Memory Makeover Mirrors, two dressing rooms with Memory Mirrors and a jukebox that can be customized to a consumer’s taste from a mobile app.
“Our Fort Worth store has been described as the most technologically advanced Neiman Marcus store to date,” says Scott Emmons, head of the Innovation Lab (iLab) at Neiman Marcus. “The technology found there is definitely a bellwether for what we would like to do with stores going forward.”
The iLab was conceived about five years ago as a way for Neiman Marcus to adapt to changing shopping patterns and new technology. Like Tinsley, Emmons agrees ROI must remain a critical component of any tech endeavor undertaken by retailers or shopping center owners. He cautions, however, that some ideas that may have seemed like sure bets at the time may not ultimately pay off, while others that weren’t as highly touted can strike gold. It ultimately comes down to trial and error.
“If it were that easy to decipher which technological innovations will be good bets, then everyone would be using them,” he says. “In the innovation area, you have to place your bets with the full realization that some will be learning experiences that will not pan out. It’s also important to understand that proving ROI is probably the toughest part of deploying new tech. To be honest, the ROI part sometimes shows up in completely unexpected ways.”
For example, Neiman Marcus’ voice-controlled wearable Theatro service, which allows Last Call store staff to communicate more efficiently and effectively with the front and back operations, was initially designed as a customer service tool. It ended up resulting in a positive ROI, however, on the loss-prevention side of the business.
“A perfect outcome in my opinion,” he says. “I get to enable better customer service and was able to prove the project also had other benefits.”
Other projects, like a “fling wall,” which allowed customers to choose shoes from an iPad look book collection and “fling” them onto the digital wall to curate a collection, was not met with success. Emmons believes he knows why.
“Technology must be carefully considered on its ability to solve a real problem for the customer,” he says. “If you only chase the bright and shiny, I think successes will be much harder to achieve.”
Sigal agrees, adding that too much of anything can be a bad thing. After all, there is such a thing as analysis paralysis when it comes to too much information, and technological overload when there are too many shiny bells and whistles.
“People don’t want to be ‘on’ all the time,” he says. “They want the opportunity to have an experience when they go out and shop. We don’t want to turn our experiences into physical Amazons, but rather provide an opportunity for the technology to be available when the customer wants it. So, a balance is very important.”
That balance also pertains to test concepts where Sigal, like the others, admits success and ROI can be difficult to measure. Difficult, but not impossible, he says. The firm uses three matrixes: measuring customer flow hour by hour/day by day; analyzing sales reports and comparing them to benchmarks both within the center and by tenant type; and sending shopping center managers to interview tenants on a monthly basis to get their feedback on the center’s efforts and any impacts on business.
“All that being said, a lot of what we are doing is trial and error and passed on subjective measurements,” Sigal notes. “All this technology and new efforts have resulted in generally smaller sizes for tenants, more spacing between deals and, in particular, more flexibility in leases to allow us and the tenants to change and evolve. Lease terms have gotten shorter, and the importance of a partner who understands technology and ties in-store technology with out-of-store technology has increased.”
When the last bell is rung and last whistle has blown, however, all this technology really amounts to the same end-game mantra retailers and shopping center owners have had since the 1950s: the customer is always right. Give them what they want — not what you tell them they want — and you’ll live to tweet another day.
“I think we have always let the customer set the direction,” Emmons says. “The difference today is the direction they want us to go changes at an ever-accelerating pace. All retailers are looking at how to be more agile so they can keep up with the customer’s needs. My role on the technology and innovation side is just one of the puzzle pieces that contribute to that effort.”
— Nellie Day
This article originally appeared in the August 2017 issue of Shopping Center Business magazine.